1. Degi sells EUR 600 mln German portfolio to Oaktree
1. Degi sells EUR 600 mln German portfolio to Oaktree
German property fund company Degi Deutsche Gesellschaft fur Immobilienfonds has sold a portfolio of 12 properties in its home market to companies or funds managed by US private equity firm Oaktree Capital Management.
The sale of the portfolio, known as 'Homer', is worth about EUR 600 mln and came at the end of a competitive bidding process launched in the third quarter of the year. The acquisition marks a significant expansion of Oaktree's German property platform and that of its co-investor Colonia Real Estate, which has a 4.8% share. On completion of this transaction, Degi said it will have halved the vacancy ratio of its Grundwert-Fonds fund to 5.9% in less than six months.
The sale of the Homer portfolio followed hard on the heels of the EUR 2.43 bn disposal of Degi's Spring portfolio at end-September as well as new investments in Helsinki and Rome and marks the transformation of the Grundwert-Fonds unit into a European property fund. Around 61.3% of the fund's assets are now located outside of Germany.
In the future, the fund - which will be renamed Degi Europa at the beginning of next year - aims to hold 70% of investments in European economic centres and the remainder in Germany. Further property purchases in Paris, Prague and Budapest are planned. Its investment strategy is focused on high-quality properties in selected locations and the fund enjoyed a one-year return of 4.2% as of October 31, 2007.
'With its more European profile, the product now stands for a property-focused investment with a stable return and a significantly upsized proportion of foreign earnings,' management board spokesperson Barbel Schomberg said in a statement.
Catella Corporate Finance acted as consultants to Degi. Earlier this year Catella managed the EUR 2.43 bn Spring portfolio for Degi.
2. Kungsleden clinches EUR 538m portfolio sale
Swedish-listed property company Kungsleden has signed an agreement with Norwegian asset manager Orkla Finans Kapitalforvaltning and Oslo-based financial services group DnB NOR to sell a large mixed portfolio of commercial properties in Sweden for SEK 5 bn (about EUR 538 mln).
Kungsleden cautioned that the deal is conditional on the financing of two sub-portfolios by 12 December 2007. 'I regard this as a good transaction for Kungsleden and our assessment is that it will be completed,' Kungsleden’s CEO Thomas Erséus said. He told PropertyEU that Kungsleden obtained a 'good price' for the properties, which was in line with the company's targeted return on equity of at least 15%. The sale price for the mix of office, industrial and warehouse assets exceeds the book value by SEK 400 mln and the acquisition value by SEK 750 mln.
The deal was initially disclosed on 27 September and Kungsleden said there had been some changes in the structure of the portfolio following the completion of a due diligence survey. Of the two sub-portfolios, Portfolio 1 comprises 30 properties with a lettable floor-space of 280,000 m2 and is valued at SEK 1.6 bn. The sale price exceeds the book value by SEK 160 mln and the acquisition value by SEK 300 mln. Portfolio 2 comprises 55 properties with a lettable floor-space of 520,000 m2 at a value of SEK 3.3 bn. The sale price in this case exceeds the book value by SEK 240 mln and the acquisition value by SEK 450 mln.
Kungsleden's holdings comprise properties with a book value of SEK 25.9 bn as of end-September this year. The assets are spread across a total of 125 municipalities, although concentrated in the Swedish provinces of Götaland and Svealand, and the Öresund region.
3. Santander in EUR 458m sale-and-leaseback deal with Ortega
Spanish financial giant Banco Santander confirmed that it has sold 10 historic properties to Grupo Pontegadea, the investment vehicle of Inditex chairman Amancio Ortega. The investment volume comes to EUR 458 mln. The bank added that the transaction will generate capital gains of EUR 216 mln. The Spanish lender has entered into a 40-year leaseback agreement and has retained the right to repurchase the properties on the expiration of the leases.
Santander, headed by Emilio Botin, said that the buildings are located in the business districts of many province capitals including Madrid (Paseo de la Castellana), Barcelona (Paseo de Gracia), Valencia, Bilbao, Malaga and Seville. They provide a total area of 76,578 m2.
The bank announced last June that it was to sell off EUR 4 bn in property assets in a sale-and-leaseback deal to help finance its part of a consortium bid for Dutch bank ABN Amro. The sale of the total portfolio could yield capital gains of EUR 1.4 bn, Santander said. Banco Santander reportedly received offers from GE Real Estate, Deutsche Bank and Goldman Sachs for some or all of a large parcel of properties being sold in lots.
The entire property portfolio comprises 44 corporate buildings, including Santander City, the bank's 1.5 million m2 head office in western Madrid, and about 1,200 offices. The Spanish lender will only retain its office in Santander, where the bank was founded 150 years ago.
4. Segro agrees EUR 160m leaseback with DHL
UK-based Segro is purchasing 36 logistics buildings in France for just under EUR 160 mln from global express delivery company DHL in a sale-and- leaseback deal. The properties provide a total annual rent of EUR 11.2 mln, representing a net initial yield of 7%. Segro said the portfolio offers 'both immediate and long-tern development potential' as it expands its relationship with DHL.
Some 60% of the portfolio by value is in the Paris region, with 10% in Lyon, 12% in Marseille and over 5% in Lille. The remainder is located in Toulouse, Bordeaux, Nantes, Orleans and Strasbourg. 'This purchase reflects Segro's strategy of selectively purchasing sites with development potential located at key hub points on Europe's freight and logistics corridors, ' the logistics real estate investment trust said in a statement.
The portfolio has a total surface area of about 210,000 m2 on 70 hectares of land and comprises distribution and logistics centres used by the DHL Supply Chain and small cross-dock facilities used by DHL Express. All the properties are subject to new, nine-year leases with DHL, 20 of them with six-year break options and six of them with three-year break options.
Segro said nine hectares have immediate development potential and an estimated 10,000 m2 of built area can be added in these locations.
Laurent Horbette, general manager of Segro France, said the company's operations had grown significantly in the country following Segro's conversion to a SIIC, the French version of a real estate investment trust, earlier this year. 'This transaction is another important step in those expansion plans. In addition this move will consolidate our presence in Lyon, following our entry into that market earlier this year with the acquisition of the Longbow portfolio. Similarly this transaction increases our presence in Marseille, provides us with an entry into the economically strong Lille market and also provides development opportunities in the medium term.'
UK and Paris-listed Segro operates in 10 countries and has investment property assets of EUR 7.1 bn. The total annual rental income from the holdings comes to EUR 280 mln.
5. ING REIM buys EUR 100m Antares building
ING REIM confirmed on Friday that it has acquired the Antares office building located in Boulogne-Billancourt, in the French Hauts-de-Seine region. The building was bought on behalf of ING Assurance from a fund managed by Schroder Property Investment Management. It provides about 10,200 m2 of space and is completely let to Française des Jeux. In a statement, ING said the investment volume comes to about EUR 100 mln.
Schroder Property Investment Management was advised by the investment department of Jones Lang LaSalle.
Immoeast adds Atrium Park to Hungarian portfolio
Listed Austrian real estate group Immoeast has announced the acquisition of the Atrium Park office development in Budapest in the form of a forward purchase, with total investment amounting to around EUR 100 mln. The project is located in Pest near Vaci Ut, the most important office location in the Hungarian capital. It provides a total floor space of 56,000 m2, of which more than 30,000 m2 comprises offices. The project also encompasses storage and retail space, conference rooms, leisure facilities and 733 parking spaces.
Atrium Park will be completed in the first quarter of 2008, but about half of the building has already been pre-let. Major tenants will include the national infrastructure development agency, the national motorway management company, the European Social Fund and an unnamed international corporation.
Immoeast said its Hungarian portfolio, which includes the Euro Business Park logistics centre (68,000 m2), the Haller Garden office project (34,000 m2) and Globe 13 (22,000 m2), is now worth EUR 1.3 bn at fair market value.